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IBEC expects pay freezes to continue next year

The business group said pay expectations needed to reflect current economic realities.

Image: Julien Behal/PA Wire/Press Association Images

PAY FREEZES AT Irish companies will continue in 2012, according to IBEC’s latest pay survey.

The employers’ group found that 69 per cent of companies will either freeze or reduce basic pay rates next year.

IBEC, which represents Irish businesses, said pay expectations needed to reflect current economic realities.

The survey of more than 400 members revealed that 64 per cent of companies intend to freeze pay in 2012, while about 5 per cent expect to reduce pay by about 10 per cent.

This year, about 72 per cent of companies will freeze pay and 7 per cent will reduce it.

IBEC director Brendan McGinty said that job protection and creation must continue to be a priority.

“Despite the fact that a quarter of companies plan to hire new staff in the next three months, employers are still not in a position to award pay increases,” he said, claiming that Irish compensation costs per employee remain 15 per cent higher than the EU15 average.

The group has proposed a number of measures to help boost employment. They include a reform of pension rules to allow people to draw down up to 25 per cent of the value of AVC’s without penalty. IBEC also suggested a social welfare smart card and property tax incentives for first-time buyers.

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